France, Greece elections cause financial turmoil

Markets tumbled after weekend votes

PARIS, FRANCE (NEWS1130) – World markets took a tumble after weekend elections in France and Greece. There are big questions about whether Europe will now be able to pull out of its debt crisis.

Traders are nervous about global economic stability since Francois Hollande came to power in France, a socialist who is ready to toss out the austerity measures of his predecessor Nikolas Sarkozy. Francis Lun, a stock analyst in Hong Kong says there are now questions about the financial formula Sarkozy and German Chancellor Angela Merkl came up with to help bail-out out Greece.

He adds investors are very worried. “Nervous that the entire austerity package imposed by Merkl will be overturned.”

Meantime, voters in Greece are angry at crippling “income cuts.” Greece’s president has handed conservative leader Antonis Samaras the mandate to start coalition-building talks, a day after a national election resulted in a hung parliament.

Samaras’ New Democracy party came first with 18.85 per cent and 108 of Parliament’s 300 seats, while parties opposing Greece’s draconian austerity program received about 50 per cent of the vote.

Samaras backs the country’s bailout commitments for cutbacks but has called for some changes to the plan.

After receiving the mandate from Karolos Papoulias, Samaras now has three days during which to build a coalition strong enough to actually govern.

If he fails, the mandate will go to the heads of the second and third parties, the Radical Left Coalition and PASOK, who again will have three days each to conclude their talks.